Electric vehicle company Rivian lays off 6% of workforce

In an effort to cut costs in preparation for an industry-wide price war, electric vehicle manufacturer Rivian Automotive plans to lay off 6 percent of its workforce in Irvine, California.

In an email to employees announcing the job cuts, Chief Executive R.J. Scaringe said the company is focused on increasing vehicle production and profitability.

With declining cash reserves and a weak economy, Rivian, along with other EV upstarts, such as Lucid and UK company Arrival, are facing falling EV prices due to recent cuts by Elon Musk's Tesla, as well as Ford Motors.

Scaringe, who apologized to employees for the job cuts, said they needed to focus their resources on ramp up and our path to profitability.

They are bleeding cash, and would like to grow at a faster rate, but they are still struggling with their EV production ramp up and unable to drive down unit costs. Garrett Nelson, an analyst for CFRA Research, said he believes that is what's behind the decision.

He said that Rivian is prioritizing the production of its R 1 trucks and electric delivery vans for top shareholder Amazon.com and launching its R 2 platform. The company, which has some 14,000 employees, will layoff 840 employees, though its manufacturing operations at its plant in Normal, Illinois will not be affected.

In order to conserve cash, it has abandoned plans for late 2022 to build delivery vans with Mercedes in Europe.

As part of a wider restructuring plan, Rivian will report its fourth-quarter results on February 28th, laid off staff and suspended some programs in July 2022.